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Labour has promised to introduce new time limits on the detention of people trapped in the asylum and immigration system in a move that would bring Britain into line with most other western countries by banning indefinite detention.

The shadow home secretary, Yvette Cooper, described the current system as inefficient and “deeply scarring” for those trapped in detention centres such as Yarl’s Wood.

The proposal is bound to be controversial, with critics claiming it would allow asylum and immigration applicants to abscond into the community once they are released. But the idea of a time limit has the broad support of the chief inspector of prisons, Nick Hardwick.

Cooper’s announcement is a response to growing delays in immigration and asylum processes over the past five years, with more people being detained for longer than three months, fewer decisions being made and fewer people being removed from the country. The number of people being held for three to six months has risen from 1,757 in 2010 to 2,385 last year. In 2014, 700 people were held for up to a year. A recent home affairs select committee inquiry found that two people had been detained for more than four years.

The chief inspector of prisons has said that “at least a third, and getting on for half, of all detainees are released back into the community” anyway. Cooper said Labour would launch a consultation on the appropriate limits to detention length and the appropriate safeguards for detention decision-making.

An all-party parliamentary inquiry has proposed 28 days and others less time. Many are detained for a few days and Labour does not want to put perverse incentives into the system so the new maximum time turns into the norm.

One option would be to increase reporting requirements for asylum applicants awaiting a decision. Labour has already announced that it will end indefinite detention for pregnant women and those who have suffered sexual violence.

In a bid to reassure voters that Labour would not leave thousands of asylum applicants to disappear into the community, she said her party would also recruit 1,000 additional border and immigration enforcement staff – paid for by levying a charge on non-visa visitors to the UK – to help speed up the process of decision-making, identifying breaches in the immigration rules, and enforcing removals.

Labour officials stressed that people with no right to be in the UK – through breaching the immigration rules or as a result of a failed asylum claim – should depart or be removed, with the minimum necessary detention and a fair, speedy decision-making process. It is widely accepted that the current system of removals is not working – leading to political gimmicks such as the Home Office’s “go home” vans touring the streets of Londonin a bid to persuade illegal immigrants to leave the country.

They also stressed that those who have committed criminal offences and were being deported because of their criminal behaviour, or those who posed a threat to UK national security or public safety, would not have recourse to the time limit.

Announcing the plans at an event in Birmingham on Thursday, Cooper will say: “The immigration detention system isn’t working.

“Immigration and asylum rules need to be enforced, but they must also be humane. Over the last few years we have seen growing numbers of people being detained for longer as a result of delays in deciding their case.

“Indefinite detention of people who have committed no crime – and without even any independent review – is wrong. It can be deeply scarring – especially for asylum seekers who have already suffered abuse. And it is extremely expensive for taxpayers. No other western nation does it. We don’t need to either.”

Zrinka Bralo, a Citizens UK campaign leader, expressed her delight, saying: “Indefinite detention is a stain on the character of Britain. Detaining people indefinitely in prison-like conditions without judicial oversight is unfair, unjust, ineffective and inhumane. It destroys lives and breaks up families. The current system has a high human cost, but it also has huge financial implications for the taxpayer, who have to fund holding people in expensive, prison-like conditions.

“This isn’t about an open-door immigration policy; it’s about establishing a time limit to help ensure that refugees and migrants are treated with dignity while they are here, on their way in and on their way out.”

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